The Value of Micro Businesses

Accord­ing to the latest fig­ures, there are 5.5 mil­lion busi­nesses in UK. 5.3 mil­lion (96%) busi­nesses are
micro-busi­nesses – employ­ing 0–9 people. Micro- busi­nesses accoun­ted for 32% of employ­ment and 19% of turnover. In terms of busi­ness growth, women-owned micro busi­nesses appear to be an increas­ing part of both the U.K. and U.S. eco­nom­ies.

The latest report from Vis­ap­rint also makes for very inter­est­ing read­ing in you are a micro busi­ness, or are think­ing of stat­ing one. Accord­ing to their research, Bri­tain ranks fourth in the world with a micro busi­ness dens­ity of 81 micro busi­nesses to every one-thou­sand people.

The Czech Repub­lic beats The United States and Indone­sia to claim the title of coun­try with the most micro-busi­nesses per cap­ita – with 89 micro-busi­nesses for every thou­sand Czechs.

This is accord­ing to the Glob­al Micro-Busi­ness Impact Report, released by Vistaprint. The new report invest­ig­ates the impact micro-busi­nesses have on the glob­al eco­nomy, by com­bin­ing and com­par­ing the latest avail­able data from research lead­ers such as The European Com­mis­sion and OECD.

Whilst the UK ranks highly in entre­pren­eur­ship, micro-busi­nesses con­trib­ute less to Gross Value Added (GVA) and employ­ment com­pared to oth­er coun­tries.

Micro-busi­nesses make up a fifth (20.4%) of the UK eco­nomy (meas­ured in GVA), nar­rowly miss­ing the glob­al aver­age of 20.5%, whilst Nor­way sees two-fifths (38.1%) of its GVA come from micro-busi­nesses – the highest glob­ally.

UK micro-busi­nesses employ 17.3% of the Brit­ish work­force, which is just above half the glob­al aver­age of 32.3%. Com­par­at­ively, Australia’s micro-busi­nesses employ 44.5% of their work­force and Spain’s employ 41.1%.

The 10 Most Micro-Busi­ness Dense Coun­tries

Num­ber of micro-busi­nesses per 1000 people

1. Czech Repub­lic (89)
2. Indone­sia (86)
3. United States of Amer­ica (86)
4. United King­dom (81)
5. Por­tugal (72)
6. Slov­akia (69)
7. Ice­land (68)
8. Liecht­en­stein (67)
9. Sweden (66)
10. Paraguay (62)

Oliv­er Har­court, head of Vistaprint UK says, “Small busi­nesses are an essen­tial part of the UK eco­nomy and it’s fant­ast­ic to see we have so many micro-busi­nesses among us. The res­ults from the research truly show the entre­pren­eur­i­al spir­it Bri­tain embod­ies. How­ever, it’s import­ant we recog­nise the chal­lenges micro-busi­nesses are cur­rently facing, includ­ing polit­ic­al and eco­nom­ic uncer­tainty, busi­ness rate increases and dampened con­sumer con­fid­ence. We, as the UK, need to ensure we con­tin­ue to cre­ate an envir­on­ment in which micro-busi­nesses can thrive and grow.”

Fur­ther research from Vistaprint has also looked at the role of women in micro busi­nesses. The num­ber of women-owned micro busi­nesses has out­paced men-owned firms for more than two dec­ades. Accord­ing to research released by the U.S. Depart­ment of Com­merce in 2010, the growth of women- owned small busi­nesses more than doubled that of men-owned firms between 1997–2007.

In the U.K., there are almost 1.5 mil­lion women who are self- employed, and between 2008- 2011 they accoun­ted for 80% of the newly self-employed pop­u­la­tion with­in the coun­try.

Sup­port­ing exist­ing micro busi­nesses and those that will be cre­ated in the future is vital. Suc­cess­ive gov­ern­ment have done little to sup­port the small busi­ness com­munity that con­tin­ues to be the back­bone of the UK’s eco­nomy.

With too much focus on tax the debate and action needs to take into con­sid­er­a­tion the par­tic­u­lar needs of micro busi­nesses. The Chan­cel­lor should take note that as we approach Brexit, the micro busi­ness com­munity will be the found­a­tion onto which the UK’s prosper­ity will be built after we leave the EU, wheth­er this is with a hard or soft Brexit.